Renewable energy-economic growth nexus revisited for the USA: do different approaches for modeling structural breaks lead to different findings? (Jan, 10.1007/s11356-021-17684-z, 2022)

Abstract

It can be observed from the existing energy literature the previous papers investigating the infuence of renewables consumption on GDP for the USA commonly ignore structural breaks in the US economy. Hence, the purpose of this paper is to examine the impact of renewable energy consumption on economic growth for the USA using quarterly data over the period 1977Q1-2019Q3 through unit root and cointegration methods based on diferent approaches in modelling structural breaks. Our empirical evidence confrms that all unit root tests give similar outputs and show all the variables become stationary at 1st diferences. Besides, cointegration tests show highly diferent results in terms of the statistical signifcance of the coeffcients. For instance, the cointegration test without structural breaks indicates that renewable energy consumption has no impact on economic growth. With sharp structural breaks in the cointegration approach, there is no cointegration between the variables. The empirical fndings of the cointegration test with sharp and gradual breaks imply that renewable energy consumption has positive efects on economic growth. This paper discusses the implications of the empirical fndings.